It is common for manufacturers or retailers to provide incentives to potential purchasers or lessees in order to increase the sale of an item. In order to encourage leasing of automobiles, in particular, a retailer may typically over-value the projected worth of the car at the end of a lease period, prior to the lease being initiated. This has the effect of lowering the monthly payments that are typically due during the term of the lease. This over-valuing may positively impact sales. However, at the end of the lease period, a leasing agent must absorb the difference being the projected value and the actual value of the automobile, if it is not purchased or re-leased by the lessee. Therefore, it would be advantageous to encourage the purchase or re-lease of an automobile after the expiration of an initial lease in order to avoid these potential losses.
Lessees also must weigh many factors in determining what to do at the end of a lease of an automobile. A lessee must consider the cost of purchasing the automobile at the end of the lease, the cost of obtaining continuing insurance, as well as other variables, such as penalties for damage to the car and excessive mileage in making a determination. It would therefore be advantageous to encourage the purchase or re-lease of an automobile by providing an incentive that would alleviate some of these costs and considerations.